The Night Chicago Tried

In the annals of historic television misfires, I'll always marvel at the time, some years back, when walking ego Geraldo Rivera somehow convinced a network into giving him a prime time slot for the privilege of showing America what was in Al Capone's vault.

I'm confident that what captured the fancy of network executives who okayed this decision, was the same thing that sort of intrigued me -- the unknown.

What did "Scarface" keep in the aforementioned depository?

A hit list for the infamous St. Valentine's Day massacre?

A carefully kept record of payoffs to Chicago's Aldermen?

For those with a somewhat fuzzy recall, when the wall was finally opened, there was, to be polite, nothing even faintly resembling anything of value.

Actually, there was nothing.

All Geraldo got for this grandstand play was a bit of dust on his clothing, while the network executives wound up with more egg on their collective faces than bus trays after the breakfast rush at Waffle House.

It was sort of the same feeling I got when the Public Company Accounting Oversight Board began their limited inspections of the Big Four firms roughly one year ago.

I'll wager that no one who follows the profession closely, or even from a casual distance, was of the opinion that the PCAOB would suffer the same indignity as Rivera, with nothing to show for their efforts once the audit wall was bludgeoned open.

In their initial round of inspections, PCAOB auditors uncovered systemic deficiencies in audit reports, but put a somewhat positive spin on their findings, congratulating the firms for their cooperation (not that they had all that much of choice).

And now that the oversight board's inspections have expanded to second-tier firms, Chairman William McDonough opined that this year's examinations, which will examine some 650 auditor-client engagements, may lead to the dreaded "R" word -- restatements.

Two weeks ago, while speaking to a conference on corporate governance, the chairman cautiously projected that as the board proceeds with its more detailed look at the work of the Big Four and four of what are labeled as second-tier firms, in theory, their findings could lead to more restatements.

Now, unlike what was in Capone's vault (and the organized crime comparison is in no way intentional), an increased number of restatements probably comes as a shock to a lot fewer people than those who tuned in that night nearly 20 years ago expecting to see Capone's innermost secrets revealed.

In Geraldo's embarrassing foray, the nation expected to find something and instead was treated to nothing. Let's hope the same thing happens, more or less, with the board's more detailed inspections of the audit firms. Or at least nothing major.

Or else we're going to see the "R" word more than we ever would want to.

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